Raspberry Pi is an extra cheap ($25-$35) bare-bones computer that is nevertheless very capable – it runs Quake 3, for example. One of the Raspberry Pi project leaders claims the little computer has quite a bit of graphical processing oomph under the bonnet too.

He’s been quoted that the Pi has more than twice the graphics prowess of an iPhone 4S. And besides doubling as a simple gaming console, Pi can also decode videos up to 1080p thanks to the built-in video hardware acceleration.

To be fair, the Raspberry Pi isn’t a mobile device so it doesn’t have to worry about battery life. But still, getting a faster than iPhone’s GPU for just $25 is an amazing accomplishment – it also beats both the NVIDIA Tegra 2 and the PowerVR SGH543MP2 in graphical performance.

The CPU is another matter though – a single-core 700MHz ARM11 processor. It may sound weak, but it’s enough for a wide range of tasks. You have to keep in mind it’s a bare-bones computer intended to boost interest in programming.

With the dedicated XBMC port, Raspbmc, you’ll be able to turn the Raspberry Pi into a capable media player for your TV. The mini-computer has HDMI and digital audio out ports and can decode Blu-ray quality FullHD video at 30fps easily.

Here’s what an early port of XBMC running on the Raspberry Pi looks like:

The Raspberry Pi is coming in two versions (basic $25 version and a $35 version with double the RAM and an Ethernet port). The first batch is already in production, so you should be able to buy one soon if you’re interested.